You have been elected to Senate. You have been asked to write a bill.

[me]

Horse manure. The guidelines were the same for these two as they were for banks. The administrators are to blame for overlooking the rules of qualification, and for creating methods of circumventing them.

I know first hand what the rules and regulations were and they had loan programs where you just stated your income and they took your word for it, it was called a no doc at first and then went to stated income and not only did investors get properties that way but home owners bought with those types too.  You could also walk away with cash in your pocket at the closing when buying by over appraising the property which helped inflate the cost of housing.  That type of loan was started so those who couldn't qualify through normal conventional loans could get a house.  Then they also had the loans where your payment was kept low for 5 to 7yrs and then went up because your income would supposedly be higher by then and you could afford the higher payments but guess what, when the 5 to 7yrs was up some found they still couldn't afford the higher payments.  There was also the tax abatement's which did the same thing.  Those were all started in the mid 90's and guess when they started falling apart.  They, those types of loans, were part of the Fannie Freddy program. 

[me]

hardly u don't know what u r saying. I was in an FMHA/USDA home and tried to refinance with Fannie Mae, no go.
i had just gone through 2 bad years of surgery and not being able to work.
When I went to college in 96-97 i did get a student loan.

But did you try a mortgage broker who had access to the different types of non conventional loans? If you went the conventional way that, of course, got you no where.

[The Troll]

I do not think the government has the fortay in telling the lenders how to evaluate risk in lending....they are NOT very good in that department..over the last 20 years they have pushed the mortgage industry so hard to get minority homeownership up and into giving "risky" loans, that it damaged the country's financial institution to accomplish its goal....that was extremely POOR advice and that is why we are in the shape we are now...We already have a department of justice who are supposed to enact the laws that we already have in place to nail who those commit fraudulent acts....it is of my opinion, that we need LESS Gov involvement and let the Private Industry handle the loan industry....I realize there has to be SOME oversight, but let the free market dictate what "caps" should be permitted on loans.....and IF they fail, they fail....this is the only way this system can "clean" itself out....it seems the MORE we regulate things, the more it costs us....always screws the little guys...

  Henry, where in hell did you get or see any law or any ruling that the government made the bank loan money to a person who made $40,000 a year to buy a $400,000 house.  Or a person who doesn't have a job to buy a house.  Show me anything that forces the banks to make bad loans.  Just any thing, not something you dreamed up.  

  Henry, do you honestly believe that  the Robber Barons are going to create a free market in the banking and the stockmarket.  That's just like saying, "That God didn't make little green apples and it don't rain in Indianapolis in the summer time."

  There only one power in this country that has the power to bring the criminal predatory capitalist under control is, THE UNITED STATES OF AMERICA GOVERNMENT.  God and the common working people sure doesn't have that power.

  Henry, it was your Republican party and the laws that Phil Gramm and his senator buddies slipped in the budget bill that let the predatory sonuvabitch loose.

The Troll  

 

[Palehorse]

I know first hand what the rules and regulations were and they had loan programs where you just stated your income and they took your word for it, it was called a no doc at first and then went to stated income and not only did investors get properties that way but home owners bought with those types too.  You could also walk away with cash in your pocket at the closing when buying by over appraising the property which helped inflate the cost of housing.  That type of loan was started so those who couldn't qualify through normal conventional loans could get a house.  Then they also had the loans where your payment was kept low for 5 to 7yrs and then went up because your income would supposedly be higher by then and you could afford the higher payments but guess what, when the 5 to 7yrs was up some found they still couldn't afford the higher payments.  There was also the tax abatement's which did the same thing.  Those were all started in the mid 90's and guess when they started falling apart.  They, those types of loans, were part of the Fannie Freddy program.

Again, the government had no part in these types of programs and skullduggery. It was the administration and leadership that initiated these types of programs and took advantage of loopholes in the laws. And if you are going to say, "Well the government should have put a stop to it"; well, wouldn't that be a higher level of government involvement and something your side is so against?

[Moonglow]

the banks etc, enjoy forclosure, the govt. supports their shortfalls in investment and they get to keep the property and all the dough.

[Henry Hawk]

  Show me anything that forces the banks to make bad loans.  Just any thing, not something you dreamed up.  

 

I will play your game....try to look up the Community Reinvestment Act ....

[Moonglow]

What Is It?
The Community Reinvestment Act (CRA) was established by Congress in 1977. The Act requires that deposit-taking financial institutions offer equal access to lending, investment and services to all those in an institution's geographic assessment area-at least three to five miles from each branch. In the case of large banks with many branches, the geographic area may encompass an entire county or even a state.

Before the CRA, many bankers excluded low-income neighborhoods and people of color from their lending products, investments, and financial services - a practice known as "redlining". Community activists coined the term when they discovered that the failure of banks to make loans in some low-income neighborhoods was so geographically distinct, that it was easy to draw red lines on maps to delineate the practices.

In the 1970s, activists in Chicago and across the country brought strong pressure on banks to lend equitably to all those in their communities. Since its passage, the CRA has been used across the United States to win tens of billions of dollars in new lending, investments, and services for communities. The National Community Reinvestment Coalition tracks more than $1 trillion dollars in community reinvestment pledges nationally. These pledges are explicit investments in equitable development goals, and finance many tools in this toolkit.
http://www.policylink.org/site/c.lkIXLbMNJrE/b.5136941/k.29F6/Why_Use_it.htm

[Moonglow]

CRA lending has been profitable for financial institutions. The ten-year California commitments made by Bank of America, Wells Fargo Bank and First Interstate Bank in 1992 were completed within four to five years. In half the time expected, a total of $21 billion had been invested in low-income communities and communities of color. This was a lesson for all the major banks: expanding products and marketing to previously ignored communities and people increased profits. These California commitments were the largest and most comprehensive in the country and helped set the terms of engagement nationally.

[Moonglow]

addition, studies by diverse groups such as Bank of America and the Woodstock Institute, a community research institute based in Chicago , have shown that mortgage loans to low-income single families are less risky than those to wealthy borrowers.

[Moonglow]

Reviewing this information reveals inequities:

•African American households received a proportion of home loans representing less than half their portion of the city population. They were denied loans more than twice as often as whites.
•Latinos and Asian Americans got loans proportionally less than their share of the population and were denied more often than whites.
•Applications taken from all people of color were significantly below their representation in Oakland. This means that the results of outreach efforts to potential homeowners of color were not proportionately adequate.
•African Americans were denied 2.3 times as often and Asian Americans, and Latinos were denied 1.3 times as often as white applicants. This indicates that the bank underwriting process may unfairly judge applicants of color.
These inequities need to be addressed in negotiations. Fairness requires new products that better meet the needs of people of color, true diversity among loan officers, and focused marketing to reach the previously underserved. These needs can also form the basis of letters to bank regulators

[Moonglow]

As part of its responsibility for supervising and regulating the CRA activities of national banks, the Office of the Comptroller of the Currency, from time to time, issues letters interpreting the Community Reinvestment Act. Those letters are published in the monthly compilation Interpretations and Actions, and are available to read and/or download by selecting from the list below. Each letter is available in HTML by clicking on the letter number, in WordPerfect 6.1 for Windows format by clicking on the WP following the description, or in Microsoft Word 97 format by clicking on the WORD following the description.

http://www.occ.treas.gov/cra/craintrp.htm


Letter states that financial institutions may receive favorable CRA credit for investing in a middle income housing down-payment assistance program if the investment is a "qualified investment" under the CRA regulation.

[Moonglow]

Community Reinvestment Act
From Wikipedia, the free encyclopedia
Jump to: navigation, search
The Community Reinvestment Act (or CRA, Pub.L. 95-128, title VIII of the Housing and Community Development Act of 1977, 91 Stat. 1147, 12 U.S.C. § 2901 et seq.) is a United States federal law designed to encourage commercial banks and savings associations to meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods.[1][2][3] Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.[4][5]

The Act requires the appropriate federal financial supervisory agencies to encourage regulated financial institutions to meet the credit needs of the local communities in which they are chartered, consistent with safe and sound operation (Section 802.). To enforce the statute, federal regulatory agencies examine banking institutions for CRA compliance, and take this information into consideration when approving applications for new bank branches or for mergers or acquisitions (Section 804.).[6]http://en.wikipedia.org/wiki/Community_Reinvestment_Act

[Moonglow]

Some economists, politicians and other commentators have charged that the CRA contributed in part to the 2008 financial crisis by encouraging banks to make unsafe loans. Economists from the Federal Reserve and the FDIC, dispute this contention. The Federal Reserve, having examined the evidence, holds that empirical research has not validated any relationship between the CRA and the 2008 financial crisis[100]. At the FDIC, Chair Sheila Bair delivered remarks noting that the majority of subprime loans originated from lenders not regulated by the CRA, calling it a "scapegoat" and declaring it "NOT guilty."[101]

[Henry Hawk]

it was not the sole problem, but there is no denying that it WAS part of this mess....WAY too many bad loans was made and hence, came foreclosures....no money down loans, there was homes made available where no prop taxes was included for the first five years....Variable Rate Loans was introduced to attract and entice home ownerships..all of this was spurred on by CRA, to raise the percentage of minority home ownership....btw, we had Fed -  Oversite Committees that was supposed to be watching over this...what happened?

[Palehorse]

it was not the sole problem, but there is no denying that it WAS part of this mess....WAY too many bad loans was made and hence, came foreclosures....no money down loans, there was homes made available where no prop taxes was included for the first five years....Variable Rate Loans was introduced to attract and entice home ownerships..all of this was spurred on by CRA, to raise the percentage of minority home ownership....btw, we had Fed -  Oversite Committees that was supposed to be watching over this...what happened?

Where is your evidence? The prior postings demonstrate that things were as I implied them to be; the feds provided the guidelines and the financial entities under their control complied. Those not did as they saw fit and created the mess.